If a firm stops production, then its:
A. variable costs decrease to zero.
B. total costs decrease.
C. fixed costs stay the same.
D. All of these are true.
Answer: D
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Use the following diagram to answer the next question. 
Assume a nation's current production possibilities are represented by the curve AB in the above diagram. Economic growth would best be indicated by a
A. shift in the curve from AB to CD. B. movement from point 3 to point 4. C. shift in the curve from AB to EF. D. movement from point 1 to point 2.
Scarcity: a. occurs only in centrally planned economies
b. will likely be eliminated by technological progress. c. exists only in poor nations. d. occurs if there are insufficient resources to provide for human wants.
The circular flow diagram divides the economy into:
a. Winners and losers. b. Real sector and nominal sector. c. Domestic sector and foreign sector. d. Agricultural sector and non-agricultural sector. e. Producer sector and consumer sector.
A devastating war that kills people and destroys buildings will:
A: shift the PPF outward B: shift the PPF inward C: move the economy from one point to another along the PPF D: move the economy to a point beyond the PPF E: move the economy to a point inside the PPF